Connors RSI (CRSI) is a technical momentum analysis indicator developed by Larry Conners to identify short-term overbought and oversold signals. The indicator is a composite of three components, i.e., the RSI, Up Down Length, and Rate-of-Change combine to form a momentum oscillator. The Connors RSI (CRSI) uses values that range between 0 and 100. (Click this link to access an economic calendar for your trading strategies)
Features of the Connors RSI (CRSI)
• Standard RSI
• Up down length
• Closing up
• Rate of change
Calculation of Connors RSI (CRSI)
Connors RSI (CRSI) is calculated using the following formula:
Here is an example of calculating Connors RSI (CRSI) using a 3 Period RSI.
CRSI [ 3, 2, 100] = RSI [ 3] + RSI[ Up Down Length, 2 ] + ROC[ 100 ] / 3
Where:
RSI = Standard RSI short-term.
Up Down Length = number of the consecutive days that an asset price is greater than the day before or less than the previous day.
Closing up = Includes the positive numbers and closing down = equivalent to the negative numbers. Where an asset closes with the same price for two consecutive days UP down is equivalent to 0.
ROC = This is the rate of change. Change in percentage of price from one period to the other and calculates the percentage of the values.
Understanding Connors RSI (CRSI)
• If the Connors RSI (CRSI) reading is above 90, that market is considered overbought and therefore regarded as bearish.
• If the Connors RSI reads below 10, the market is considered to have been oversold and therefore, bullish.
Uses of Connors RSI (CRSI) Indicator
Traders use the indicator to identify overbought and oversold markets over a short period. Compared to the traditional RSI that defines 70 and 30 as the overbought and oversold levels, Connors RSI (CRSI) is more volatile and moves quickly, making it require more extreme levels to be set.
The indicator recommends using 90 and 10 for overbought/oversold levels which can be altered to meet the trader requirements.
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